Moving in Oakham from a 2 bed to a 4 bed will cost you £944pm

Moving to a bigger home is something many residents with growing young families aspire to.  Many people in 2 bedroom homes move to a 3 bedroom home and some even make the jump to a 4 bed home. 

Bigger homes, especially 3 bed homes are much in demand and it can be a costly move.


If you live in Oakham in a 2 bedroom property and wish to move to a 4 bedroom house in the town, you would need to spend an additional £239,098 (or £944.44 pm in mortgage payments (based on the UK Bank average standard variable rate)).  However, this jump is quite rare as most people jump from a 2 to 3 bedroom home and then later in life move from a 3 to 4 bedroom home.

So, after being asked my thoughts on moving home in Oakham by a friend recently, please find my analysis of the local property market and then some thoughts.  

To start with, let us see what the average property price is for an Oakham property by the number of bedrooms it has.

 

Average Property Price in Oakham by Bedroom
1 bed	2 bed	3 bed	4 bed	5 bed
£155,530	£191,639	£249,080	£430,737	£534,360

 I then decided to calculate what it would cost to make the jump upmarket from 1 bedroom to 1 bedrooms, 2 to 3 bedrooms etc, etc, both in actual money and in mortgage payments (using the current standard variable rate of UK Banks of 4.74% - so the mortgage cost could be higher or lower depending on the mortgage taken).

 

	Oakham
	Price Difference to make the move	Cost per month to move up market (Mortgage)
1 bed to 2 bed	£36,110	£142.63
2 bed to 3 bed	£57,441	£226.89
2 bed to 4 bed	£239,098	£944.44
3 bed to 4 bed	£181,657	£717.55
4 bed to 5 bed	£103,623	£409.31

There are some interesting jumps in costs when moving upmarket as an Oakham buyer.  The cost of moving from 1 to 2 beds, and 2 to 3 beds is relatively reasonable, whilst the jump from 3 to 4 beds in Oakham is quite high (and hence why some 4 bed properties are taking slightly longer to sell nowadays).  

 On an aside, a lesson here for all my landlord property blog readers, you can quite clearly see why the larger 4 and 5 bed properties don’t offer the best returns for buy-to-let because the monthly finance costs and rents achieved don’t match up so well (i.e. A mortgage for a 4 bed home in Oakham would cost you 72.93% compared to a 3 bed mortgage, but the jump in rent would be a lot less than that - although depending on your circumstances, 4 bed homes can offer other advantages to buy to let – pick up the phone if you want to know what they are in more detail).

So, coming back and looking at the stock of properties in Oakham, this also makes thought-provoking reading …

 

Housing Stock in Oakham by Bedrooms
1 bed	2 bed	3 bed	4 bed	5 bed
5.26%	23.68%	44.74%	23.68%	2.63%

The most active purchasers are 20-somethings and 30-something homeowners with growing families.  Many look to more modern developments for the perfect balance of access to decent primary schools, commutability and lifestyle.  

For landlords looking to buy within Oakham, they face stiff competition from these 20/30 something families, making the 3 bedroom home massively in demand, often attracting spirited offers and selling within weeks of listing.  This mix of homebuyers and landlords is a pressure point in the Oakham property market.  

 

Again, if you are a landlord, call me and I will show you areas with decent returns where you aren’t in so much competition with young Oakham family homebuyers.

Yet, the cost of an additional bedroom can be too much for some. It is quite challenging moving home the first time, but to then find you are priced out on the next move up the ladder can be quite disconcerting, with families often having to move to a different part of town to get the bigger home they need.

Nevertheless, that’s the place many homeowners find themselves in with the cost of the additional bedroom being too much to bear.

To those buying your home for the first time, all I suggest is you not only consider the mortgage payments and other costs of your first home, but also do your homework into your next rung up the property ladder.  Thinking about it now will keep you ahead of the game in the future; as your number of bedrooms, family property needs and lifestyle wants change.

...and to Oakham landlords – well these changes in the way people live also mean there are opportunities to be had in the Oakham rental market.  Many Oakham landlords are starting to pick my brain on this, so if you don’t want to miss out – drop me a line.

David Crooke  / david@upp-property.co.uk

Owner and MD

Oakham 01572 725 825

Sales & Lettings